(July 9, 2020)The Charity Report has just released Where Wealth Resides, a study about the top community and private foundations, and donor advised funds in Canada. The 20 private foundations have cumulative assets of 32 billion, yet only 8 of the 20 are public facing with websites. The McConnell Foundation, which has an extensive public presence and makes a wide range of grants each year, is number four on the private foundation list. We wanted to get their take on the role of philanthropy, the criticism big philanthropy is weathering right now, and any plans to mitigate the increasing visible inequity.
Stephen Huddart has been with The J.W. McConnell Foundation for 17 years and been the CEO since 2011. He serves on the board of the Transition Accelerator and the Governing Council of the International Well Building Institute and is a former member of the Government of Canada’s Social Innovation and Social Finance Strategy Steering Group. Under his tenure, the Foundation has played a leading role in developing social innovation and social finance in Canada – integrating its granting activity with program-related investments in things like affordable housing, renewable energy, and economic reconciliation with Indigenous peoples. Stephen spoke with Editor in chief Gail Picco on June 30, 2020. It’s been edited for context and length.
GAIL PICCO: Hi Stephen. Thanks for taking the time to chat. How is your team dealing with the pandemic fallout so far?
STEPHEN HUDDART: We began working online early on, and took steps to assure grantees that we would be there for them as they adapted to the crisis – introducing flexibility in the use of our funds, and relaxing reporting requirements. Our Board approved an increase in our disbursements this year that enabled us to introduce three new funds – a COVID emergency response fund; a fund for rebuilding organizations; and one that supports discharged patients and frontline workers in the healthcare system with access to healthy food. As well, through the Innoweave program, we worked with the former head of the BC-Yukon Division of the Canadian Red Cross to organize coaching for leaders dealing with crises in their organizations and communities.
GAIL PICCO: There’s so much we could talk about, but I’ll try to keep my questions efficient. I want to get to the point of the Trustees deciding to increase the disbursement quota for the foundation to 5% in a second. But first, more generally, with the COVID pandemic and now the ongoing call to deal with systemic racism, both of which highlight significant inequities in our society, do you think the philanthropy sector, including private family foundations like McConnell, have a role to play in mitigating inequalities?
STEPHEN HUDDART: One of philanthropy’s most important roles is to support efforts to achieve social justice. The letter Andrew Chunilall [CEO, Community Foundations of Canada] released recently speaks about the need to address systemic racism, beginning in our own organizations. Similarly, Senator Ratna Omidvar has called on the community sector to establish baseline data on equity and get to work making greater efforts in this area, while reporting on progress.
With urgent calls to act at the personal, organizational and societal levels, there is much for philanthropy to learn; new relationships to build; and enduring commitments to make.
GAIL PICCO: Is there any special programming you’re doing that you’d like to highlight around that?
STEPHEN HUDDART: The work foundations can do now will build on the generational scale commitments some have made to Indigenous reconciliation. At McConnell, this includes Indigenous-led work on child protection; an Indigenous affordable housing program; Indigenous-led work in the justice system; support for Indigenous entrepreneurs and so on. We are exploring how to extend this kind of support to Black organizations. We’re forming a joint Board/staff/advisor working group to guide this work, and also to review our internal standards and practices to make them more inclusive.
GAIL PICCO: Foundations have been under scrutiny lately in an unprecedented way. Essentially, the argument is that private foundations are cumulatively sitting on tens of billions of dollars that have been tax credited by Canadians, yet only a trickle of that comes back to society each year. Do you feel the criticism is fair?
STEPHEN HUDDART: The point you made earlier about only 8 of the largest 20 foundations having websites raises valid questions around transparency and accountability. Donor advised funds are another area where we need more scrutiny.
In addition to looking at granting activity, and disbursement quotas, foundations should be required to put their endowments to work generating change in line with their missions. The issues we’re dealing with are too important to dedicate only 3.5% of our resources to solving them.
GAIL PICCO: Now, the numbers I’m looking at from 2018 show the Foundation’s expenditures at 4.88% of assets, already pretty close to the voluntary increase to 5%. Yet grants to qualified donees was about 2.61% in 2018. The foundation’s own charitable activities took up about 30% of expenditures. What kind of charitable activities does the foundation undertake on its own?
STEPHEN HUDDART: Those numbers reflect the fact that some organizations we support are not registered charities, but social enterprises or agencies to whom we issue contracts for charitable purposes – including community economic development, affordable housing and environmental work. In other cases, grants may have been made through third parties, such as a United Way or MakeWay (formerly Tides Foundation Canada). We also operate our own programs, like Innoweave. And as I mentioned, we have an extensive impact investment portfolio. With some program-related investments, we make grants to create the conditions for social finance initiatives. Overall, the intent is to use all of our resources – granting, investing and convening – to create change.
GAIL PICCO: Now that we’ve covered some of the easy questions, I’d like to move to the topic of systemic racism in philanthropy in particular. We know from the data there are very few heads of private foundations of colour, that the boards of directors are even more homogeneous, and that in the U.S. only 8% of foundation revenue is granted to dealing with racially focused organizations, and that organizations led by Black, Indigenous or people of colour get 75% less grants than other groups. Where do we start?
STEPHEN HUDDART: With staff, board and community advisors, we’re embarking on a systematic review of our granting programs, investments and capacity-building activities. We know we can and should do more. An early finding from our Innoweave program arose from a declined application from a Black-led organization in Atlantic Canada that was challenged by the applicant. Our standard response – that a proposal hadn’t met our standards – should be changed to ‘how can we help you improve your capacity to obtain this grant and other funding?’. This in turn requires a different approach and a different kind of relationship.
Back in 2003, Indigenous children’s rights advocate Cindy Blackstock published research showing that there was a formidable divide between Canadian funders and Indigenous organizations serving children and families. She went on to create a curriculum that introduced each sector to the other, delivered in workshops hosted by Indigenous communities. We were honoured to support this work and learned much about sustaining and extending that kind of support over the next 17 years.
In terms of next steps, listening to leaders who are Black, Indigenous or people of colour, spending time in their communities, and enabling them to make decisions about what to fund is a good place to start.
GAIL PICCO: This has been great, but I feel like we’ve just scratched the surface today, Stephen. We’ll have to talk again, a little way down the road.
STEPHEN HUDDART: Yes, that would be great. I look forward to it.